Incentives in The Workplace
Every great place to work has a company culture that is unique. One way that these cultures are made unique is by the way they setup incentive plans to motivate their employees. Incentives are not a new concept in a work environment, but just like the workforce has changed over the years, so too have these encouragement plans. The key to creating one that works and is effective for your organization is to understand what your employees’ value and what will make them willing to work harder or longer. We are going to look at some of the different incentive plans and how they have evolved over the years.
In the past, most of the incentive plans were tied directly to monetary rewards. One such example of this is quarterly, or yearend company bonuses. Depending on how well the employees and the company performed during a given time period, there would be a distribution given to qualified people. It offered workers a chance to be rewarded for helping the company achieve its goals. Attendance was another way companies motivated their employees. They would provide extra money or an extra day off when attendance goals were reached. This same idea was put into action with production or quality goals as well. The more parts someone made, the bigger their bonus at the end of the month or year. Pensions (company or union based) are another legacy incentive plan. Pension’s gave incentive for the employee to be loyal to their employers and stay with the company until retirement by contributing money each pay period to a retirement fund that could be cashed in later. The longer the time the person worked for the company, the greater their share when they retired.
As society and the workplace have progressed as time goes on, so too have the ways to motivate employees. Different generations value different things, especially when it comes to what inspires them. So where monetary rewards were highly successful in the past, the new generation of workers, specifically millennials, are more likely to value education or time-based rewards. One of the ways companies are incentivizing this new breed or workers is by allowing the employees to work from home. Workers like the flexibility of not being tied to an office and feel they are more productive when they can work at their own pace. It also builds a stronger relationship between the employee and their employer and there is a mutual trust factor involved that the work is being done and time is not spent on laundry or groceries. Many employers are also providing more vacation time to millennials. Where 2 or 3 weeks a year used to be the highest one could earn over their careers, some employers are offering that to start. As companies become leaner, they require more out of their employees and want to make sure people don’t get “burnt out” on working.
Corporations have also added educational based incentives to their arsenals. Tuition reimbursement is becoming widely popular as college students are incurring large amount of debt from student loans. They may also be willing to pay for continuing education or additional job specific training. Instead of an induvial paying for an extra class and adding to their debt, companies may elect to pay for that instruction as a way to enhance their workforce. These types of education-based plans usually involve some sort of contract to make sure the employee sticks around so that the employer feels they have gotten a return on their investment.
At the end of the day, there is no right or wrong way to incentivize the workplace. All of these methods can be effective, the trick is to try different options and find out what works best for your particular workforce. When done correctly, incentive plans not only help motivate employees to work longer or harder but can also help to increase retention and build quality relationships between employer and employee.